There's still substance in loyalty

Sylvia Pennington

Not offering a cool, trendy mobile app for your customers yet? No need to feel you're behind the eight ball. Digital alternatives for loyalty schemes are not yet the be-all and end-all.

Melle Staelenberg, mobile product manager at digital communications consultancy Salmat, says that although some Australian retailers now have smartphone apps with a loyalty component, printed or plastic cards have not been consigned to the technological scrap heap.

“The majority of Australian loyalty programs have no online component, so there is still a long way to go,” Staelenberg says.

“There are different ways for businesses to engage with their clients and an app might not be the right choice for everyone.

"People don't want their phone's home screen cluttered with apps from businesses they only interact with sporadically. However if you, as a business, currently issue paper or plastic loyalty cards to your customers, you should definitely consider mobilising your program.”

Department store chain Myer has done so. MyerOne members can have their smartphones scanned at the register and use the MyerOne app to access membership information such as shopping credit balance and tier status.

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A range of vendors have piled into the virtual card and wallet space in anticipation of growing demand for such systems. Apple recently introduced Passbook for iOS, a virtual wallet where loyalty cards, boarding passes and coupons can be stored.

On the fast food front, popular loyalty apps, including eCoffeeCard and Beat the Q, allow customers to self scan a QR code with their smart phones.

At Sumo Salads, the 100-strong chain of lunchtime munch and crunch purveyors, providing a digital alternative is on the agenda for 2013.

The company began overhauling its loyalty offering in March 2011 with the launch of Sumo Society, a web based program with 60,000 members.

Subscribers receive a swipe card, cumulative points for every dollar they spend, birthday freebies, health tips and details of new product launches via Facebook alerts and the occasional email.

Those who've signed up eat at the stores more often and spend an average 23 per cent more per transaction than non-members, according to Sumo co-founder Luke Baylis.

“We've found that by getting people engaged with the brand, we can communicate with them and provide membership benefits,” Baylis said.

“We had a stamps-based loyalty system before which was nowhere near as effective. There was no intellectual property or data collected and a lot of fraud.”

Although admitting the company was off to a slow start in the digital arena, Baylis said it expected to migrate members to a mobile system in 2013.

“The issue with this is that not everyone has a smart phone,” Baylis said.

“But within 12 months, the majority of customers will have a smart phone, the rest can keep using the cards ... in the longer term that's where it will go. People will be paying with their phones in future – we have to make the transition.”

Zarraffas Coffee founder Kenton Campbell takes a more insouciant approach. The chain has 50 stores across Queensland and NSW, 95,000 members in its card-based loyalty program and no plans to pension off the plastic.

Campbell says going digital is inevitable over the next three to five years and while not bottom of the to-do list, it's not number one priority either.